In the second full week of January, Australian dollar deal activity was highlighted by National Australia Bank's A$2.25 billion (US$1.6 billion) five-year, dual-tranche, senior-unsecured transaction. Meanwhile, Asian Development Bank kickstarted the Kauri market for the year with a NZ$300 million (US$199.2 million) five-year deal.
Asian Development Bank (ADB)’s 15 January deal is a sign the Kauri market has returned with a willingness to price in line with global benchmarks, deal sources say.
ANZ Banking Group (ANZ) says it brought forward its recent tier-two transaction in the US to take advantage of strong market conditions at the start of the year.
Transition is the theme of the day in global sustainable debt, and Australian capital markets are adopting the idea that funding environmental and social evolution across the economy is the next frontier of development. But they are hamstrung by retrograde government behaviour – especially in the environmental space.
The Kangaroo supranational, sovereign and agency (SSA) market has started 2019 with a trickle rather than its usual flood and intermediaries say Australian dollar pricing has been uncompetitive compared with offshore markets. They report solid fundamental demand but say a supply uptick is unlikely until there is a shift in the basis swap and pricing expectations.
Contact Energy (Contact)’s new sustainability-linked loan (SLL) incentivises improvements in areas such as corporate governance, stakeholder engagement and environmental impact. Participants in the deal believe that the SLL product will be applicable for a broad set of borrowers in New Zealand as it is elsewhere.
On 16 January, International Finance Corporation (IFC) (AAA/Aaa) launched a minimum A$50 million (US$34.6 million) increase to its June 2029 Kangaroo bond. Indicative price guidance for the forthcoming deal is 43 basis points area over semi-quarterly swap, equivalent to 44.75 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to joint lead managers Nomura and TD Securities.
On 16 January, Pepper Group (Pepper) began taking indications of interest for its new auto and equipment asset-backed securities (ABS) transaction, Pepper SPARKZ Trust 2. Total capped volume for the deal is A$618.5 million (US$427.2 million), according to National Australia Bank.
Westpac Banking Corporation (Westpac) executed a multitranche senior-unsecured deal and a covered-bond transaction in the US dollar market on 9 January 2020. The issuer says it received strong ongoing support as major-bank benchmark deals continue to flow freely in domestic and global markets, though the US has been the jewel in the crown.
On 16 January, Housing New Zealand Limited (Housing NZ), a subsidiary of Kāinga Ora – Homes and Communities (Kāinga Ora), announced a NZ$2.5 billion (US$1.7 billion) wellbeing bond programme for the 2020 calendar year. It comes after the borrowing protocol limit for Kāinga Ora increased from NZ$3.05 billion to NZ$7.1 billion.